United have teamed up with Yorkshire based company GMI Construction Group Plc to tbuild the hotel.
GMI Construction has worked with the Blades on a number of development projects, including the construction of the club's Forsyth Academy in Shirecliffe and the Westfield Health corner stand at Bramall Lane.
Workers began on site on 14 May and Site Agent Clynt Hiscoe explained that enabling works are now taking place - a process which will take around eight weeks.
He said: "This is a fairly big job. There will be 20 men on site when we're doing the foundations. The project will take 70 weeks to complete.
"The hole we're digging out is four metres deep at the moment and we're going down to almost five metres."